Cable lobby rebuffed in attempt to ban public broadband networks.

The Kansas cable lobby's attempt to ban nearly all municipal broadband networks won't be rising from the dead any time soon.

Last month, the Kansas Cable Telecommunications Association (KCTA), whose members include Comcast, Cox, Eagle Communications, and Time Warner Cable, proposed a ban on telecommunications, video, and broadband services offered to residents and businesses by municipalities. The bill would also have made it illegal for cities and towns to buy, build, lease, maintain, or operate any facility that helps a private business offer telecommunications, video, or broadband services.

Further Reading

One exception allowed municipal networks in "unserved areas," but the bill defined those areas in such a way that none may exist. The bill also had an exception for services provided in municipal buildings. After extensive criticism, the KCTA said it would "tweak" the language in the bill to redefine unserved areas.

Now, though, one of the bill's main opponents is declaring it dead.

"We stabbed it and shot it and hanged it and dissolved it in hydrofluoric acid, and flushed it down the toilet. It's dead," Joshua Montgomery, who runs a small ISP in Lawrence, KS, told Ars.

Montgomery and other opponents of the bill are still sending letters to legislators every day. Between the negative press for the proposed broadband ban and a separate bill to legalize discrimination against gay people, Montgomery thinks Kansas legislators are in no mood to pursue anything controversial for now.

"We are on top of it. We are not going to let it come back up," he said. "I think we did really kill the entire issue for at least a year."

The broadband bill had been scheduled for a Senate committee hearing, but that was canceled. Kansas Sen. Oletha Faust-Goudeau (D) told Montgomery in an e-mail that the bill "has lost its momentum at this time."

When asked if the KCTA plans to submit a revised version of the bill, KCTA President John Federico told Ars this week, "at this time it is highly unlikely that we will be pursing legislation this Legislative Session."

Kansas cities lack adequate broadband

Kansas Budget Director Jon Hummell submitted a financial note on the bill that summarizes some of the opposition's arguments:

The League of Kansas Municipalities indicates that passage of SB 304 would have a significant fiscal effect on the cities in Kansas. The League states that many Kansas cities do not presently have adequate broadband service to meet their own needs or the needs of local businesses and industry. A city may choose to proceed on its own to establish the needed infrastructure and provide the service to the community where existing private businesses do not provide it. The League contends that passage of SB 304 could cause the loss of economic development opportunities, which would include additional jobs and increased assessed valuation of property. In addition, the League notes that an unintended consequence of the act would be that cities would be precluded from leasing space on water towers and other similar aerial structures for use by telecommunications and cable industry. These lease fees can generate thousands of dollars per year for the cities which would be lost under the provisions of the act.

The Kansas Association of Counties is unable to estimate what the long-term fiscal effect of passage of SB 304 would be. However, the Association expresses concern that because the bill would revoke local authority to build networks, as well as prohibit municipalities from entering into public-private partnerships, rural locations could be unable to attract modern businesses if the private sector failed to develop an adequate network infrastructure.

ISP lobbies have claimed municipal networks would siphon away taxpayer dollars. But Christopher Mitchell, director of the Telecommunications as Commons Initiative at the Institute for Local Self-Reliance, has pointed out that "most networks sell bonds to private investors who are repaid by revenues from the network." It's more common for a municipal broadband service to subsidize other government services than it is to cost taxpayers money, he said.

The Kansas bill's stated goal was to "encourage the development and widespread use of technological advances in providing video, telecommunications and broadband services at competitive rates," even though it would actually protect private ISPs from competition.

Montgomery would like to see a bill that encourages municipalities to build out fiber networks and provide wholesale access to ISPs. "Retailers, guys like me and Comcast and Time Warner and AT&T and anybody who wants to play, would be able to use that wholesale fiber to provide services within the community," he said.

Montgomery said that he drew up language for such a bill and has meetings scheduled with state senators, but he doesn't expect anything to come of it. "A mechanism that basically bans municipalities from being retailers but encourages them to be wholesalers would address a lot of the issues the cable companies are concerned about and still benefit the community," Montgomery said. "That's the pitch I'm going to make. Probably no one is going to listen to me, but I'm going to make it."

Promoted Comments

This is what the free market is all about: if the service you provide isn't GOOD ENOUGH the government can and SHOULD step in and eat your god damned lunch. Step up your shit and service your customers and maybe you won't have to worry about your profits being eaten by a more deserving competitor.

In an age where corporate collusion is rife, it appears that sometimes government IS the answer. Who'd a thunk?

This is what the free market is all about: if the service you provide isn't GOOD ENOUGH the government can and SHOULD step in and eat your god damned lunch. Step up your shit and service your customers and maybe you won't have to worry about your profits being eaten by a more deserving competitor.

In an age where corporate collusion is rife, it appears that sometimes government IS the answer. Who'd a thunk?

I STILL don't understand the logic of telling them what they can or can't build. If taxpayers want internet then there is no sensible reason to ban government from providing it. That is literally what it is supposed to do: provide services with the money collected from the community that will most benefit said community. That's the whole damn point. If the free market can't provide it, tough.

The telecoms want a revised version of this bill where municipal broadband providers are forced to be wholesalers. While that sounds "kind of " sensible on it's face, it's imposing a rule that the private telecom carriers would not be subjected to. A rule like that should be applied to everyone.

Our local municipal fiber has been built and operated at a loss by the municipality, but that in no way means that it is a good idea to ban other municipalities from doing the same thing. Municipalities, counties, and states should be free to do what makes sense for their own people. At the same time those same entities should look closely at existing regulations that may be keeping out proper competition in their own area.

First: I'm not a scholar in telecommunications law. So, go ahead if you must and start the angry flames that will surely follow this post.

This legislation seems to rely on the legislation originally passed to protect the telephone companies: legislation that incentivized the buildout of their networks by ensuring municipalities would not compete.

At the same time, however, the same groups are claiming they are NOT telephone companies and should not have to abide by the laws for common carriers so they can avoid the Net Neutrality laws.

I'm not sure if they should be asking for their cake while they're still chewing the last piece.

It's good to see this die for this session, but opponents will have to be on the ball in the next session, as it may well reemerge in a modified form. There is no end to how sneaky some in the lobbying and legislature will be in order to get unpopular shit passed.

This is what the free market is all about: if the service you provide isn't GOOD ENOUGH the government can and SHOULD step in and eat your god damned lunch. Step up your shit and service your customers and maybe you won't have to worry about your profits being eaten by a more deserving competitor.

In an age where corporate collusion is rife, it appears that sometimes government IS the answer. Who'd a thunk?

Totally agree, Also the government would never ban private ISPs. Why would it be OK for the opposite to happen? It goes against the free market concepts.

It is a good development, but no cause for celebration. The oligarchs will come back, with a better proposal, a more devious approach, more campaign contributions, and whatever it takes to protect their racket. The only thing to do now is for KC to build a fast, affordable - and profitable - service, so the users can see what is possible when you go around the gate keepers. That would make it hard for the Telcos to come back, or would force them to offer something truly competitive.But that requires that the service be built very quickly - before they can reload - and be profitable, so it cannot be accused of being subsidized. Unfortunately, I doubt that many cities are capable of doing that.Enjoy the small victory while you can, the war will be lost soon enough if we don't change the way elections are run and laws are written.

Last month, the Kansas Cable Telecommunications Association (KCTA), whose members include Comcast, Cox, Eagle Communications, and Time Warner Cable, proposed a ban on telecommunications, video, and broadband services offered to residents and businesses by municipalities.

How is this NOT contradicting Comcast's stance on their merger with TWC ?

And yet here they are getting shot down for trying to block competition.

I've mentioned this before - but the minute that Google Fiber is in range - I will drop Comcast / Cox / TWC or whoever is my provider at the time in a heartbeeat (unless they step up their services to match or best Google's offerings).

The telecoms want a revised version of this bill where municipal broadband providers are forced to be wholesalers. While that sounds "kind of " sensible on it's face, it's imposing a rule that the private telecom carriers would not be subjected to. A rule like that should be applied to everyone.

I don't know that it's necessary for it to be applied to everyone. Government providing service in this area is generally a bad idea. Infrastructure is the natural monopoly, not service. Government should eliminate the infrastructure barrier to entry and then get out of the way and let there be level playing field in the market. Government getting involved as an actual competitor in the non-monopoly space is almost inevitably a market distortion.

As long as the municipal network is solid, however, forcing the private networks to go wholesale doesn't really serve a purpose. If they want to eat all of the costs for their own infrastructure and not share it with retailers, that's their business and it will hurt their competitiveness against the public network that can split that cost across the ISPs using it. It's an easy bet who's going to be able to offer lower prices, even w/o dipping into the tax till. The closed network only provides its monopoly advantage when there is no competing wholesale network, because new firms simply can't enter the market. That is why the incumbents hate the idea of municipal networks w/a fiery passion; it turns their cash-cow infrastructure into a millstone around their necks. If they let it stagnate as they have been, they lose competitiveness (since there is suddenly the actual possibly for competition). If they move to upgrade it to compete, it comes out of their profits (and their ability to pass that on to consumers is limited by having competing services).

Forcing incumbents into common carriage is generally an alternative to public infrastructure in an attempt to get the effect w/o incurring the public costs. Once you have public infrastructure, there really isn't a point to adding common carriage requirements as well.

The cable industry will try again and its important to note they only need to win once.

We need to get legislation that protects municipal internet - that is the only way we can create an environment for investment by municipalities.

Agree with most of your points, but hydrofluoric acid is definitely NOT a weak acid. It's classified as a strong acid, is extremely corrosive, and is also a significant toxicity hazard through skin contact. As in, if you dunk your arm into a vat of the stuff, even briefly, it will most likely kill you.

The cable industry will try again and its important to note they only need to win once.

We need to get legislation that protects municipal internet - that is the only way we can create an environment for investment by municipalities.

That's it. We need to win every time. They only need to win once.

Even worse, they will not only come back, but they will play dirtier. There is no limit to how low they will sink. They will game the system. Bribe the right people. Sneak it through in the middle of the night. Attach it to some must-pass legislation.

You are right. What we need is legislation that protects municipalities ability to invest in internet infrastructure.

If the existing ISPs were doing a good job, this would not matter. How does US internet service compare to other countries?

Universal open access fiber is the only model that really makes sense. We don't require power companies to each build their own separate lines to every building, why should Internet service be any different?

There is absolutely not one good reason something like this should ever become law. I fail to comprehend how this could make it so far as to even be considered for a vote. And you got to love this line:

"When asked if the KCTA plans to submit a revised version of the bill, KCTA President John Federico told Ars this week, "at this time it is highly unlikely that we will be pursing legislation this Legislative Session."

Translation: We'll just have to wait until new reprenstatives are in place that we can hopefully bribe so that we can get our way and "legally" establish our monopoly. There are some seriously twisted & corrupt individuals out there.

As long as the municipal network is solid, however, forcing the private networks to go wholesale doesn't really serve a purpose. If they want to eat all of the costs for their own infrastructure and not share it with retailers, that's their business and it will hurt their competitiveness against the public network that can split that cost across the ISPs using it. It's an easy bet who's going to be able to offer lower prices, even w/o dipping into the tax till. The closed network only provides its monopoly advantage when there is no competing wholesale network, because new firms simply can't enter the market..

There are myriad problems with just letting private firms build their own infrastructure and keep it private:1) The incumbent can always drop their prices to scare of new competitors while the new competitor is doing a build-out. Then once the competitor is dead, raise them again. There's no incentive for a new competitor to show up, since it'd be a huge cost (laying wires) for a fairly unprofitable area (since you'd have to compete against the incumbent).2) There's no point in ripping up streets N times for N competitors. One last-mile wire is sufficient to carry all the data and is basically a commodity, so why not have someone (government or the first guy) lay it once and then resell it to everyone else? Saying "you lay it, you own it" would be like saying "well why not let every power company create its own poles and lines and keep them to themselves?"

Capitalism is an ok way of allocating resources, but there are certain situations where a purely-capitalistic approach doesn't work. Infrastructure is one of them.

Canada has mandated wholesale reselling, and it works somewhat well. It certainly works better than not having it at all. I can get 25mbps/2mbps for $40/mth (which significantly undersells the incumbents, and thus ever-so-slightly reigns in their worst behaviour). The fun part is that when they (TekSavvy) activate it at my new place, it'll be an employee/contractor of the incumbent (Rogers) doing it.

As long as the municipal network is solid, however, forcing the private networks to go wholesale doesn't really serve a purpose. If they want to eat all of the costs for their own infrastructure and not share it with retailers, that's their business and it will hurt their competitiveness against the public network that can split that cost across the ISPs using it. It's an easy bet who's going to be able to offer lower prices, even w/o dipping into the tax till. The closed network only provides its monopoly advantage when there is no competing wholesale network, because new firms simply can't enter the market..

There are myriad problems with just letting private firms build their own infrastructure and keep it private:1) The incumbent can always drop their prices to scare of new competitors while the new competitor is doing a build-out. Then once the competitor is dead, raise them again. There's no incentive for a new competitor to show up, since it'd be a huge cost (laying wires) for a fairly unprofitable area (since you'd have to compete against the incumbent).2) There's no point in ripping up streets N times for N competitors. One last-mile wire is sufficient to carry all the data and is basically a commodity, so why not have someone (government or the first guy) lay it once and then resell it to everyone else? Saying "you lay it, you own it" would be like saying "well why not let every power company create its own poles and lines and keep them to themselves?"

Capitalism is an ok way of allocating resources, but there are certain situations where a purely-capitalistic approach doesn't work. Infrastructure is one of them.

Canada has mandated wholesale reselling, and it works somewhat well. It certainly works better than not having it at all. I can get 25mbps/2mbps for $40/mth (which significantly undersells the incumbents, and thus ever-so-slightly reigns in their worst behaviour). The fun part is that when they (TekSavvy) activate it at my new place, it'll be an employee/contractor of the incumbent (Rogers) doing it.

You're missing the point. Once there is a municipal infrastructure in place, no sane new ISP entrant is going to say "I want to build my own network." They're going to lease the public lines. The folks who already have private networks will retain them, but the pressure will be to lease them out in order to be able to share their infrastructure costs since the loss of monopoly status will make those costs much more of a concern.

Your example is a situation where a new entrant has to have their own network to compete, which is not the situation w/a municipal wholesale network. It just further illustrates my point. You need EITHER public infrastructure OR common carriage, not both.